NYSE-listed Brazil Potash Corporation has signed a memorandum of understanding with a power generation company called Gera Center, outlining a 28-year build, own, operate and transfer (BOOT) contract for a modular diesel power plant that will serve as the primary energy source during construction of the Autazes potash project.

The companies have also agreed to build an emergency backup system throughout the mine’s initial 23-year operating life.

Brazil Potash selected Gera Center as its power provider following a formal competitive procurement process. the company will transfer $33-million in upfront power generation capital from the project’s construction budget to operating costs spread over 28 years under the BOOT structure.

Brazil Potash expects the plant to deliver about $10-million in net savings over the contract life as compared to Autazes’ prefeasibility study (PFS).

Under the terms of the contract, Gera Center will supply, install, operate and maintain 63 containerised modular diesel generator sets with a peak capacity of 20 MW. The system is designed to be phased in line with growing construction energy demand – starting at 10 MW and progressing to 20 MW over the first year, with initial power delivery due to be available on site within 120 days.

Owing to conventional grid electricity not being available at the project site during construction, the plant will serve as the primary energy source for all civil works and shaft-sinking activities.

Upon start of mine operations, the same system transitions to a 23-year emergency backup role, ensuring continuity of production in the event of any disruption to the primary transmission line connecting Autazes to the Brazilian national grid.

Ownership of all power infrastructure transfers to Brazil Potash at the end of the 28-year contract term. In the meantime, Gera Center is contractually required to maintain a minimum 98% operational availability during this phase, with a maximum two-hour response time to any critical incident.

The companies will now work towards executing definitive agreements in coming months. The power generation system is expected to be fully installed and delivering primary construction power within the 120-day mobilisation window following contract execution, aligned with Autazes’ shaft-sinking schedule.

“This BOOT agreement with Gera Center provides reliable power for construction in a location where the grid is not yet available while reducing the upfront project construction costs,” confirms Brazil Potash CEO Matt Simpson.

He adds that Gera Center was selected through a rigorous competitive process, and their proposal came in below the company’s own PFS estimates by about $10-million over the project’s life.

“This same plant that powers construction becomes our emergency backup for the life of the mine, and is one of up to five BOOT contracts the company is currently advancing as part of the project construction funding strategy.”